Mike Peterson
Apple has inked new deals with some of the world's largest record labels for Apple Music, though the terms of the company's agreements suggest that a combined services bundle is still distant.
A combined Apple TV+, News+ and Apple Music subscription has reportedly been in the works for some time, with some rumors pointing toward a 2020 debut. In November 2019, Apple was said to be including language in its deals that would allow it to bundle its services.
Now, it seems like the music industry may derail those plans, at least in the short term.
Apple has secured multiyear deals with Universal Music, Sony Music and Warner Music in recent months, allowing the company to continue streaming popular artists, The Financial Times reported on Thursday.
As the publication notes, however, those contracts don't contain any type of economic agreements that would allow Apple Music to be bundled with the company's other services, such as Apple TV+ or Apple Arcade.
Apple has apparently informed music labels that it intends to combine its media services into one package, but the Times reports that the two sides of the discussion have yet to settle on the exact details of a bundling plan.
Streaming services, like Apple Music, regularly renegotiate multiyear contracts like these to hash out streaming rights and royalty agreements.
While Apple has secured new multiyear agreements with the major players, Apple Music's chief competitor seems to be having a more difficult time at locking down contracts. Spotify is still "locked" in licensing talks with major record labels, continuing high-stakes negotiations that have been ongoing for at least a year.
Apple Music had at least 60 million paid subscribers as of last summer, though the company hasn't released any updated data since then. Spotify has more paid subscribers with 124 million worldwide, but Apple Music is still dominant in the U.S.
Apple's Services sector in general has been slowly expanding to become a significant revenue driver for the company. In 2019, Apple raked in $46.3 billion, up from less than $30 billion in 2017.
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6 Comments
On a music-industry site it's claimed Apple wishes to reduce artist/right holder payouts in order to make the planned services bundle attractively priced. I'm sure some musicians are doing a bit of pushback as are at least some of the labels. Apple is asking them to forego some revenue with the promise that eventually they'll make it up with more subscriptions. I can understand the reluctance since no matter what Apple wins taking 30% or thereabouts for themselves.
It’s a shame the music industry are holding Apple hostage on this! Think about all the people paying for news, arcade, TV or storage that’d be willing to pay a few more bucks for music/all services. I’m sure Apple will give more profit from the other services to make up for part of the drop in music margin, but growth would also make up for this. With recurring revenue, it’s always better to maximize. I’m holding out for a services bundle!